Magazine article Editor & Publisher

Sun-Times Parent Buys Chicago's Daily Southtown

Magazine article Editor & Publisher

Sun-Times Parent Buys Chicago's Daily Southtown

Article excerpt

FOR THE SECOND time in less than a year, American Publishing Co. has bought a Chicago daily newspaper.

On Dec. 23, the parent of the Chicago Sun-Times bought from Pulitzer Publishing Co. the 56,000-circulation Daily Southtown, its 400,000-circulation, free-distribution shopper and its commerical printing operation.

The price was $39.1 million in cash, before post-closing adjustments.

Just this March, American Publishing, a unit of Canadian newspaper mogul Conrad Black's Hollinger Inc., bought Chicago's second-biggest paper, the 519,000-circulation Sun-Times, for $180 million in cash. That deal included two chanis of suburban weeklies: the Pioneer Press papers that circulate in the city's north side and northern suburbs and the south suburban Star newspapers.

"We're very pleased to make another strategic acquisition in the vibrant Chicago market," American Publishing president Larry Perrotto said. "This acquisition complements the operations of Star Publications, which serve the south and southwest sectors of the Chicago area market."

Perrotto said the Daily Southtown would be an independent operation of American Publishing.

In addition to the obvious possibilities of combined advertising sales, the deal also focused immediate attention on whether the Sun-Times would move production to the Daily Southtown's modern presses.

In contrast to the aging letterpress presses at the Sun-Times' cramped downtown plant, the Southtown has two lines of Goss Metro and Urbanite offset presses with full-color capability.

The Southtown, in fact, has long-term agreements to print the Midwest editions of the New York Times and Investors Daily. It also prints the Daily Chicago Defender, the black-interest tabloid with 22,000 circulation, as well as the St. Louis Post-Dispatch's TV book. In addition, Gannett Co. recently moved printing of its Chicago-area USA Today circulation from the Chicago Tribune's state-of-the-art Freedom Center plant to the Southtown.

American Publishing officials said they have "no specific plans yet" to move Sun-Times production to the Southtown.

"We're going to study the situation," Perrotto said. "There may be some possibilities. The fact is, the current press capacity could not handle the Sun-Times just now."

The Southtown itself has shown considerable growth in recent years. When Pulitzer Publishing bought it 1986, it was an evening paper known as the Daily Southtown Economist with a circulation of 15,900. Last year, the paper dropped the "Economist" moniker, implemented a major redesign and switched to morning publication.

According to the Audit Bureau of Circulation's FAS-FAX report for the six months ended Sept. 30, 1994, the paper had a daily circulation of 55,813 and Sunday sales of 62,322.

According to Pulitzer Publishing's annual report, the Southtown posted operating revenue of $46.5 million in 1993.

By selling the Southtown, St. Louis-based Pulitzer pulled the final plug on its ill-starred Chicago operations. In 1985, Pulitzer entered the market with per changes are anticipated. For the the purchase of Lerner weeklies, which then had about 280,000 in combined circulation. In 1986, Pulitzer added the Daily Southtown Economist and News Marketer in a deal the company then valued at about $40 million.

The combination never had the desired impact, however, and in 1993 Pulitzer unloaded the former Lerner papers. …

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